Evercore Partner analysts Patrick Wang and Michael C. Lucarelli expect a potential upside for Apple Inc. (NASDAQ:AAPL) iPhone estimates in the fourth quarter. Analysts who recently visited Asia have shared their mixed views on the supply chain in a report titled “3Q Asia Trip.” In the report analysts also noted the probable performance of different technologies in the market.
Apple 4Q may beat estimates
According to the analysts, Apple Inc. (NASDAQ:AAPL) will see higher growth in the fourth quarter, even though order estimates have generally outpaced the actual reported units in Asia. Keeping consensus with other reports, Evercore analysts also feel that Apple will see growth strongly in the fourth quarter. One of the analysts, Rob Chira, increased his iPhone estimates from 54 million to 56 million, and for the September quarter, the analyst is eyeing 33 million units.
iPads went into production towards the end of the August and were consistent with late October product refresh. For the September quarter, Chira is expecting 14.5 million iPads before product refresh, and then 22 million in the December quarter, fueled primarily by new iPads.
Analysts also note that there are speculations about the hybrid device for fall 2014 along with a larger display iPhone next year.
Other info gathered from the Asia trip
The analysts mentioned that supply chain of handsets performed better than expectations. There has been an increase in the inventory levels to a point where there was modest 3G build ahead of the Golden Week. In China, entry level 2G handsets are seeing a downtrend as network carriers are no longer providing subsidies.
For DRAM, which analysts see as “another bright spot on our trip,” analysts are looking forward to stable pricing in the starting of next year as contracting NB units are being counterbalanced by less absolute supply, no signs of capacity adds, and robust server demand - also benefiting NAND.
Micron is ahead of peers and will benefit from the shortage of graphic memories needed for PS4 consoles and discrete VGA add-in- cards.
Demand for NT servers remains robust and should fuel Intel Corporation (NASDAQ:INTC) to achieve double digit growth. Server memory consumption is seeing increasing rates supported by steady data center builds in US and in China. Additionally, analysts are expecting further downside in the NB units between 12 percent to 13 percent year on year in 2013 compared to a decline of 7 percent to 10 percent year on year from the last report.